Posts

In 2001, at the launch of the first Xbox, Steve Ballmer said:We know we have to succeed [with a game strategy] but there is a broader concept there that we will pursue at some point. You can say, is it the end of the road or is there a bigger play? And the answer is yeah, there's a bigger play we hope to get over time." I guess we got to that point. In yesterday's New York Times Bits section, Shane Kim, newly appointed head of strategy and business development for Xbox was quoted as saying: “We have been very focused on making sure we win in the gaming space,” Mr. Kim said. “Now that we expand and our aspirations broaden, we need to think about which assets of Microsoft fit in.”Which closes the loop on what I wrote in December 2001:Microsoft is following a strategy that worked for it before: Get a foothold, and iterate. They want to get a position in your home and continue to expand and improve until they consume more and more of the applications and operability for the…

This post is possibly more timely today than when it was originally posted.

I am a bit behind the times, but I just read gamedaily's interview with Gamestop's new CEO and it kind of made me feel icky in my tummy. This guy is in charge of about a third of the video game sales and he is not on our side. His positions on digital distribution and used games make him sound either delusional, or like an ostrich with his head in the sand.

BIZ: What are your thoughts on the digital distribution options that connected consoles are introducing to gamers today? Do you see today's gamers bypassing retail one day, as music consumers currently do with iPods and iTunes?

DD: The first digital distribution was Napster and it was illegal. Let's just start there. The software publishers are afraid to death of piracy. Once a full game is lying on a hard drive, there's the potential for piracy. Aside from the games, the bandwidth, etc., our studies have concluded that the network wo…

In the first chapter of his latest propagandist tome, Hot Flat and Crowded, Thomas Friedman addresses the issues arising from increased security around embassies. He writes about moving the US Embassy in Turkey from the city center, where it existed for over one hundred years, to a remote location, encircled by impenetrable walls. The original embassy was in the crowded town square. The new embassy was far removed from the population and very much resembled a prison. In his words, it could have been used as location for the filming of the Turkish prison film, Midnight Express - you know, the one with the tongue scene. He referenced a number of diplomats who explained how difficult it is to convey anything other than negative thoughts about their country from behind walls. When diplomats are allowed to walk out the door to get a cup of coffee and invite citizens into the building, they get a sense of the culture. When everyone is locked out, they get a sense of the people ru…

I hate the used game market. I first wrote about last February, but at the time, no one else seemed to care. The "used games are bad meme" is finally starting to build. Folks from Epic, Atari and others spoke out against the practice in recent weeks, while the Gamestop CEO continues to rationalize the value to the industry with voodoo math (In case you are interested, I addressed the flaws in his argument a few months ago.) I guess caring and speaking publicly are steps in the right direction, but the solutions proposed don't address the issue.

The publishers seem to think episodic installments and downloadable content will help, but if they read the message boards, they will quickly learn it will only exacerbate the content. So long as we have trade in value from Gamestop, games become depreciating assets. Gamers are getting a quick lesson in beginning economics. The game is burning value as it stays on the shelf. Each day they way the value to them of keeping…